Nvidia’s Blowout Quarter, Fitch’s Warning, Exclusive: Toll Brothers CEO 5/25/23

SPEAKER_1 (0:00)

Okay, text from the wedding planner. She's talking about a cake pop mural.

SPEAKER_2 (0:05)

Ah, exciting.

SPEAKER_1 (0:07)

Ooh, it's $8,000. Oh, I don't know, we're trying to save for a house.

SPEAKER_3 (0:12)

Well, you only get married once, or twice.

SPEAKER_4 (0:15)

The three time stops.

There's a lot of bad money advice out there. For knowledge you can trust, come to GISA Credit Union. Whether it's saving for the wedding or everything that comes after, we can help get you where you wanna be. Find a healthier approach to money at GISA.

Carl Quintanilla (0:31)

Market Moving Insight and Analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, live at Post 9 of the New York Stock Exchange. Faber has the morning off. Historic morning when you consider the record that Nvidia may set in single day market cap gains. Debt ceiling optimism, Speaker McCarthy instructing and negotiators to work 24-7 as the US is now under review from both Fitch and Morningstar. Our roadmap begins with Nvidia's blowout, now targeting the trillion dollar club and the single, the biggest market cap gain in a single day, boosted by strong AI chip demand. That negative watch Fitch does warn as the US debt default deadline looms and Best Buy beats, but says consumers remain cautious as electronic sales slow.

Let's begin with Nvidia. The stock is surging, closing in on that trillion dollar valuation, getting a big boost from AI chip demand. This is Jensen Huang talking about AI on the call last night.

Jensen Huang (1:33)

We've seen it in a lot of places now that you can't reasonably scale out data centers with general purpose computing and that accelerated computing is the path forward. And now it's got a killer app, it's called Generative AI. And so the easiest way to think about that is your trillion dollar infrastructure.

Every quarter's capital, CapEx budget would lean very heavily into Generative AI, into accelerated computing infrastructure. Everywhere from the number of GPUs that would be used in the CapEx budget to the accelerated switches and accelerated networking chips that connect them all.

Carl Quintanilla (2:19)

Jim, this morning, the Goldman Desk says it's probably the best TMT print they've seen since Zoom in 2020

Jim Cramer (2:25)

I think that that's wrong. Zoom in 2020 was aided by illness. This is just brilliance.

And the calm nature of this man and his humility is so stark with what's occurring. And even just the way he was speaking in somewhat of a flat way, he will not be in anyone's face, but to translate for our viewers, what he's saying is that right now, a data center has about 5% of his material, GPU, and 95% CPU, which is in your PC, and that that needs to flip. And it's gonna be 95% his materials and 5% CPU. So this is going to happen at a level of speed that is shocking people.

And the reason is just because when all of those orders, the inventories that you heard, the problems that Taiwan sent me, that things had dried up because of the law, he went all in and procured all that he would ever need for the next year. That's why the numbers, you could have such a guide up. You're going from people looking for 7 billion to 11 billion. That's because he has it. It's in hand.

Carl Quintanilla (3:41)

And that's a quarter guide.

Jim Cramer (3:42)

Yes, and what's going to happen is he told me, just imagine you have an iPhone 5

And suddenly the iPhone 14 comes out. None of the apps on the I14 work on the 5 So you have to upgrade. And this cycle is a 10 year period before everybody gets there.

But because he had the foresight to have the GPUs now, six weeks, six weeks.

Everybody who needs it wants it. I'm in awe of this man. I don't wear typically my true dog tags that he gave me, which is of course my, I named my dog. This is our second dog. And Jensen felt it was important that I get the second dog renamed Nvidia. But I renamed Everest Nvidia. And I said that this is about as high as I can put it in the club. And then I went to own it, don't trade it. And he was like happy to, cause that's like the Apple's status that I have. But it was all because I, if you mean him, he's so compelling. Because again, he's a teacher.

He mostly talks about how this will cause less waste. I mean, one of the first things he said is the great thing about this, about, there we go. The great thing about, good time stamp there, what he's doing also is it uses far less energy. That was when I had to.